A direct assay for plasminogen activator (PA) was developed. It employed polyacrylamide gel electrophoresis in the presence of sodium dodecyl sulfate and beta-mercaptoethanol to monitor PA-mediated conversion of single chain, 125I-plasminogen to two chain plasmin. By incorporating Triton X-100, albumin and trasylol in the reaction buffer, we were able to minimize the adsorptive and autolytic loss of reactants frequently associated with similar approaches. Under these conditions, plasmin formation was linear for at least 24 hours, dose-dependent over a 20-fold range of urokinase concentrations, and at least 100-fold more sensitive (0.05 units/ml) than previously reported direct assays for PA. The versatility of the assay was demonstrated by its ability to distinguish between urokinase-like and tissue-type PA, and to quantitate the effects of agents like fibrin and epsilon-amino caproic acid on their respective activities. The assay was readily adapted to detect inhibitors of PA in various samples, and was employed to demonstrate the presence of such inhibitors in both rabbit and bovine endothelial cells. Interestingly, the rabbit inhibitor was found to block the activity of urokinase but not that of tissue-type PA, while the bovine inhibitor neutralized the activities of both molecules. These results demonstrate that cleavage of 125I-plasminogen can be employed as a direct, sensitive and quantitative assay for various PAs, and thus offers a new approach for studying plasminogen activation and agents that stimulate or inhibit it.